Charlotte City Council mulls property tax hikes to pay for big projects

Charlotte City Council mulls property tax hikes to pay for big projects

Charlotte City Council mulls property tax hikes to pay for big projects


by STEVE HARRISON / Charlotte Observer

Posted on April 14, 2013 at 10:34 PM

After a nearly yearlong deadlock over a capital budget, the Charlotte City Council has tentatively endorsed a plan to raise property taxes and ask voters to approve $800 million in projects.

But will council members risk a tax hike months before facing voters?

“There had been some members who expressed concern about raising taxes in an election year,” said Democrat Beth Pickering, who voted against a $926 million capital budget last year. “I don’t enjoy raising taxes, but I am personally OK with it. I think they are good projects. I am prepared to do it.”

Last week’s breakthrough – if it holds – came after City Manager Ron Carlee decided to remove, for now, a controversial streetcar extension from the capital budget.

The 2.5-mile streetcar extension has divided council members since June, leading to a half-dozen budget meetings without consensus. During a February retreat, some council members melted down, shouting at each other for more than an hour.

Carlee said he needs more time to study the streetcar and its promised economic benefits. He also said he wants to examine different ways to pay for it – something council members failed at last fall.

Carlee said he intends to bring the streetcar back to the council by June, when the overall budget must be considered. But he said the streetcar would be separate and not included in the overall capital budget that he presents in May.

Republican Andy Dulin isn’t convinced.

“I have to make sure the streetcar is really out,” said Dulin, who voted against the budget in June. “The streetcar is still the problem. Even when they take it out, they leave it in.”

He said he will probably vote against the capital plan. He believes some other council members will join him because they are up for re-election.

Mayor Anthony Foxx isn’t seeking a third term, but some current council members may choose to run for mayor. In addition, District 2 representative James Mitchell – who usually wins re-election in landslides – has decided to run for a citywide at-large seat, which is more of a challenge.

Democrat Patsy Kinsey voted for the capital budget last year and she supports the streetcar. But for the past year she has been vocal about the difficulty of approving a tax increase in an election year, though she did not rule out voting for a hike in June.

Two plans win endorsement

Council members endorsed two plans Wednesday.

The first would increase the city’s property tax rate in July by 3.17 cents for every $100 of taxable property. The owner of a $200,000 house would pay $63.40 more in city property taxes each year.

Under that plan, voters would be asked to approve bonds in November 2014. If voters rejected the bonds, the tax hike would remain, unless the council voted to remove it.

There would be additional referendums in 2016, 2018 and 2020.

The other option is to approve a smaller property tax hike in July, of 2.78 cents for every $100 of taxable property. That translates to $55.60 more each year for the owner of a $200,000 house.

There would be referendums in 2014, 2016, 2018 and 2020. The same projects would be built, but more would be shifted to later bond cycles. The city would be able to stockpile some money in the first few years of the capital program.

The downside is that projects would take longer to build.

The plan being considered is essentially the same plan former City Manager Curt Walton proposed in March 2012, minus the streetcar and a partnership with UNC Charlotte’s Informatics program.

Goal: Spark growth

The capital plan is designed to spend money in some of the city’s poorer neighborhoods and spark economic development. Because the city has little room to annex, Walton and Foxx believe the city must improve existing areas to grow its tax base.

Highlights of the capital plan include:

• $44.72 million to improve the road network west of Charlotte Douglas International Airport. The city projects the area will grow with warehouses and distribution centers once Norfolk Southern opens its intermodal yard inside the airport.

• The city would spend $92.6 million for projects in east and southeast Charlotte. They include $10.4 million for a streetscape project for Monroe Road and $25 million to renovate Bojangles’ Coliseum for amateur sports.

• The Bojangles’ project needs $25 million in private funding, along with $10 million from the Charlotte Regional Visitors Authority. Deputy City Manager Ron Kimble said Friday the CRVA has little money to contribute, but he hopes the tourism authority will have money by 2015 or 2016.

• Northeast Charlotte would receive $166 million. The biggest project would be $106.6 million for infrastructure improvements along the Lynx Blue Line extension, which is being built from uptown to UNC Charlotte, mostly along North Tryon Street.

• The city would spend nearly $170 million on “increasing connections” across Charlotte. There would be $60 million for sidewalks, $35 million for a 26-mile bike and pedestrian trail across the city and $48 million to improve traffic signal coordination and to repair and replace bridges.

• There would be $133 million for “improving communities.” That includes $61 million for six new fire stations, $60 million for affordable housing and $120 million for neighborhood improvements for five communities. They are: West Trade/Rozelles Ferry; Prosperity Village; Central/Eastland/Albemarle; Whitehall/Ayrsley; Sunset/Beatties Ford.

Democrat David Howard, who holds an at-large seat, said he’s OK approving a tax increase before the September primary and November general election.

“I won’t not do it to protect my own hide,” Howard said. “I am comfortable with going back to the public.”

Council members are scheduled to continue discussing the capital plan Monday.